Category Archives: Division of Matrimonial Pot

Round-Up of Divorce News

Spring has arrived and what better way to ring in the Spring season than to summarize some of the few highlights from Divorce news stories circulating the Web.

Gender and Diversity In Divorce

South China Morning Post published a story about a decision by a Court in Beijing, China ruling that a Husband should compensate his Wife for housework she had done over a period of five (5) years. The penalty? US$7,700. Whilst there may be some housewives out there that might scoff at the idea that 5 years’ worth of housework was only worth a penalty of US$7,700, it is in fact an interesting ruling as it places a monetary value to chores and housework.

According to the SCMP article, there has been and continues to be a larger debate in China about the role of women who stay at home rather than enter the workforce. This is the first ruling of its kind in China since a marriage law came into effect on January 1, 2021. With the new law in place, it will be interesting to see how this plays out and how women (who continue to mostly be in charge of housework in China) will be compensated as they are now entitled to request relief from the Court.

Chasing After The Sun

In a recent Miami Herald article, it was declared that Florida is fertile ground for love such that divorced men are choosing the state of Florida as their primary destination to move to after a divorce. Could it be that it is perhaps the sun and that sun-kissed glow attracting newly single men to flock to the sunny Florida state?

According to the article published by the Miami Herald, a study by MagnifyMoney confirms that Florida is welcoming nearly 2,581 men in the 12 months after a divorce. The study states that the real reason men are choosing Florida over other states is due to job opportunities and career advancement along with the lower cost of living offered by Florida as an incentive to move. Given the current state of affairs around the globe, it also would make sense for individuals to move where space is a luxury, as is outdoor recreation activities. After Florida, men are choosing California, then North Carolina as their second and third best destination option.

If men are heading to Florida, then where are women heading? According to the study, women opt for Texas, followed by Florida, then Georgia.

Divorce and Daughters

In a new article published by The Economist, there are several studies conducted in America which confirm that having a female first-born does in fact increase the risk of the child’s parents divorcing, particularly in America and the Netherlands. This study conducted by Jan Kabatek of the University of Melbourne in Australia and David Ribar of Georgia State University in Atlanta, Georgia, USA also states that “daughter-divorce” risk emerges only in a first-born girl’s teenage years. According to the researchers, the primary reason behind the “daughter-divorce” risk is based upon the fact that parents quarrel more over the upbringing of teenager daughters versus teenage sons.

Covid-19, Depression and Divorce

In unsurprising news, the BBC reports that due to the Covid-19 pandemic, there has been a rise in depression and stress among parents resulting in fears, worry and anxiety. This has led to frequent arguments among couples, thus placing additional stress on the relationship and opening the door to couples considering separation and divorce. Demands faced by parents are becoming increasingly stressful as parents not only are dealing with Covid-19 related fears, but the resulting effects of Covid-19 including lockdowns, home schooling mixed in with the pressures of work commitments.

According to the report, Oxford researchers are now tracking both children and parents’ mental health throughout this crisis.

Those are some of the more interesting stories hitting the web. Stay tuned for additional summaries of interesting stories circulating the web related to divorce.

Pet Custody and Crafting Pet Parenting Plans

In this modern world, there is a growing trend of couples choosing not to have children. This is especially the case when individuals are more inclined to focus on careers and other responsibilities. For those couples who still wish however, to add to their family unit, there may be an inclination to add furry friends to the family nucleus. As more households include pets, it is no surprise that pets can and do become a central focus when couples split in their divorce proceedings. So, who gets the pets in a divorce? What can courts do when “dividing” a pet in matrimonial proceedings and what part should you play in resolving this dispute regarding your family pet?

Legally, pets are not afforded the same rights as a child and whilst you may consider your pet to be your child, the courts will not see it that way. Instead the court will look at pets as property and so, since pets are considered property, there is no “custody” issue to be resolved. This does not mean you and your ex-spouse need not be creative when resolving disputes related to your pet.

Here are some things to consider:

Brainstorm a pet parenting plan: There is no limit to creativity when it comes to the idea of crafting a pet parenting plan. Brainstorm a pet parenting plan that allows you and your ex-spouse to have regular visitation with your family pet. Similar to a child custody and visitation agreement, you and your ex-spouse can agree on who pays for vet bills, who is responsible for visitation travel, and the date and time for regular visitation. Ask your solicitor to assist in formalizing a contract to crystalize the pet parenting plan that you and your ex-spouse have agreed to. It is important to remember that the courts have no power to make orders regarding pet custody since pets are considered “property.” The same custody rights that children are afforded are not the same with your pet.

When brainstorming a pet parenting plan, it is important that both you and your ex-spouse be mindful and sensitive towards the needs of a pet. You may want to discuss with your ex-spouse the time each of you spend with the pet, as the pet will certainly be bonded to one individual over the other. Who has more time to spend time with the family pet on a daily basis? Who travels frequently? Who takes the family pet to the vet and to pet playdates? Who has care and control of the children and does this affect a pet parenting plan as the children may be closely bonded to the family pet? These are all important considerations to be mindful of when brainstorming a pet parenting plan.

Pet Timeshare/Visitation Schedule: Similar to a child sharing plan, a pet parenting plan can outline the visitation times you and your ex-spouse will share your beloved pet. You and your ex-spouse can be creative in how you want to divide time with your pet, as long as you both agree to a suitable timeshare. Need some ideas? How about:

Every other weekend and one night a week
One week on, one week off
2-2-5-5 schedule: Parent 1 has the pet for two days. Parent 2 has the pet for the following two days. Parent 1 has the pet for the next five days. Parent 2 has the pet for the next five days and so on.

The above pet parenting schedules are just a few examples of how pet parenting can be divvied up between you and your ex-spouse. But ultimately, a pet parenting schedule should be crafted so it is tailored to what works for you and your ex-spouse. You both may also want to consider pet timeshare during major holidays, which can also include Mother’s Day, Father’s Day, pet birthdays and long-weekends. What happens if your ex-spouse wants to move away to another city? Have an open discussion with your ex-spouse about who will get primary custody of the pet and consider allowing the other pet parent to have time with the pet for the entire summer. If your pet is involved in extra-curricular activities, the party that is responsible to take the pet to these activities should be memorialized in your agreement. These days, there are so many activities that pets can become involved in, including pet play dates with other pets and their owners or even “Yappy Hours” that allow pet parents to meet, mingle and drink with other pet parents and their pets. In the USA, they even have “Hoppy Hour” for those who are bunny parents and where bunnies can mingle and play including agility classes where bunnies learn to hop over obstacles and compete in races! Be creative, it is up to you both as dedicated pet parents!

Shared Costs For Your Pet: Another issue you and your ex-spouse may want to weave into your pet parenting plan is how costs will be shared between the two of you. Having a pet is expensive. There are vet bills to consider, in addition to costs for food, maintenance and grooming. If you have a dog, there may be dog walkers and doggy daycare costs to be considered too. There will also be transportation costs to calculate into the equation when you and your ex-spouse have to transport your pet to and fro from each household.

Assign The Ultimate Decision-Maker: Generally, when parents fight for child custody in Hong Kong in a divorce, one (sole) or both parents (jointly) will be assigned custody over the child, with one parent having care and control and the other parent access. Although pets are not treated with the same legal considerations as a child, this is something that you may want to discuss and consider when sharing a pet with your ex-spouse. For example, who will be the ultimate decision maker when your pet becomes ill? Who will make decisions related to your pet’s death, burial and costs associated with your pet’s death? These are all things you definitely should consider if you and ex-spouse are committed to sharing your pet after a divorce.

Finally, here a few more things to consider when crafting a pet parenting plan which focuses on the mental health of both yourself and your pet!

Talk to a Solicitor, Talk to Your Veterinarian: Pet custody is a real issue, especially now that pets are no longer considered just “pets” but are quickly becoming valuable members of a family. In the event that you establish a pet parenting plan, you may also want to consider consulting with your veterinarian so he or she can give you tips on how to make the transition easier for your pet now that your furry four-legged friend is being shuttled between two households. Like children, pets undoubtedly require a level of consistency between two households.

Consider Talking To A Therapist: In the event your ex-spouse has “custody” of your pet, you may want to consider speaking with a therapist. In a divorce, there is truly a sense of loss and a grieving process that each member of the family must go through. The grieving process may be magnified if you no longer have access to the family pet especially if a close bond was established with the pet during the marriage. It is for this reason why brainstorming a pet parenting plan may be something to consider, especially if it helps lessen the sense of loss you may feel and experience during the divorce process.

Remember to be creative when drafting a pet parenting plan. Like children, focus on what is in the best interests of your pet!

Relationship Generated Disadvantage

In this article, we will look at the principle which is referred to as “relationship generated disadvantage.”

So what is relationship generated disadvantage in divorce? In divorce, a spouse may request compensation for relationship generated disadvantage and it is most often applied when one party has given up a lucrative career to care for the children of the family. As seen in Miller v Miler; McFarlane v McFarlane [2006] UKHL 24, this concept recognizes that one party, usually a wife, may have seriously damaged his/her ability to earn money for the sake of the family. This is even if the party’s future needs have been met generously.

It should be emphasized that this principle has only been seen in exceptional circumstances so before you believe you can receive such compensation upon divorce, it is important you read through this and most importantly, speak with your solicitor so he/she can advise you properly.

Now that we have clarified the meaning of a “relationship generated disadvantage” let’s talk about a recent UK ruling whereby Mr. Justice Moor stated that a couple who had been married for approximately 10 years and had two children together should split their assets but then added that the wife, a graduate lawyer from Cambridge University who had sacrificed her career to raise the parties’ children should be awarded an additional £400,000 as compensation. It is important to note that this additional £400,000 award was on top of an equal split of the matrimonial pool of approximately £10,000,000.

In his ruling the Judge reasoned that there was a relationship generated disadvantage because the husband, also a lawyer, had enjoyed a “stellar” career and the husband’s career took precedence whilst the wife remained at home as the primary carer of the children.

According to reports from the UK, the couple met in September 1999 when the husband was an associate solicitor and the wife was a trainee. After the wife qualified and made an associate in March 2001, the two individuals became a couple and shortly thereafter the husband became an equity partner at a law firm. The wife worked as a solicitor and in 2006 was promoted to be a managing associate and later moved to a bank to become an in-house lawyer in 2007. After the couple married in 2008, they moved into a large home valued over £5.8 million. Like many couples with children, the pair decided that she would take a step back from her career to raise the children whilst her husband continued to advance in his law career.

According to the reports, the wife returned to work in a part-time non-legal role after her 1^st maternity leave but then was made redundant in December 2016 and has not worked since then.

In awarding the wife £400,000 in a relationship generated disadvantage compensation award, Judge Moor calculated this based upon the husband’s future working life of 4 more years at his firm (before an encouraged retirement after 20 years of practice) and that wife had earned approximately £100,000 a year both at the firm and the bank.

Following this ruling, the wife’s UK lawyer provided a comment to the UK press stating that they were delighted at the outcome for their client and emphasized that their client had sacrificed a potentially lucrative career to raise a family.

It is important to note the UK Judge’s statement in his ruling where he emphasized that “[I] accept that it is unusual to find significant relationship-generated disadvantage that may lead to a claim for compensation but I am clear that this is one such case.” Thus, it is not the usual circumstance where a Family Court will find that a spouse shall receive such compensation.

When a Family Court looks to the distribution of finances, the Family Court will look at factors outlined in Cap 192 Matrimonial Proceedings and Property Ordinance section 7. These factors include:

Income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future
Financial needs obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future
Standard of living enjoyed by the family before the breakdown of the marriage
Age of each party to the marriage and the duration of the marriage
Any physical or mental disability of either of the parties to the marriage
The contributions made by each of the parties to the welfare of the family including any contribution made by looking after the home or caring for the family

However, this most recent ruling by the UK courts may be something to discuss with your solicitor if you feel you have suffered a relationship generated disadvantage, as it may be an argument to present to the Family Court in your matter and it is apparent the Family Court may consider such compensation to you.

The Fight for the Family Home in Divorce

A major bone of contention among divorcing couples is the division of the family home. This is understandable given that couples invest considerable time, effort and money in creating a dwelling place and for the majority of couples, the family home is a major asset that a couple acquires during the marriage. Having a roof over your head and over the heads of children is of paramount importance to a court when making decisions related to the matrimonial home. It is for this reason that individuals must have a realistic view of what can happen to this asset during a divorce. One potential change may be the loss of the family home. A party to a divorce may be required to “downgrade” to a smaller place or may even be required to rent instead of own a home, which for some is a difficult change of circumstances.

So, with this in mind, what happens to a family home in a divorce and what options are available? Here are a few things to consider when discussing the family home in a divorce:

Sell the Family Home:

One option that divorcing couples opt for is to sell the family home. Proceeds from the sale of the home are then split accordingly between you and your ex-spouse, the split percentage being agreed upon by you and your ex-spouse or by court order. Prior to the agreement or order for the sale of the family home, you and your ex-spouse may be required to hire an expert valuer to value the property in question, especially in circumstances where you and your ex-spouse cannot agree to the listing price or the percentage split of the sales proceeds of the home.

In Hong Kong, the Family Court has the authority to issue what is called a “Mesher order” which basically is an order to sell the family home but at a postponed time until a named event occurs, such as when a minor child graduates from high school or university. The Family Court will look at the facts surrounding the family before making any such orders but the goal in postponing a sale is to consider the accommodation of one spouse and the children.

Another power of the Family Court is to issue what is called a “Martin order.” This is similar to a Mesher Order, except that under a Martin Order, one party is given an entitlement to occupy the family home for life or until remarriage.

In certain situations, if a transfer of property results in one party having a larger share of the matrimonial pool, the individual who receives the greater share may be required to compensate the other party a lump sum of the gain or the receiving party can hold a legal charge over the property until such time he/she can be later compensated.

It is important to bear in mind that if a Family Court makes an order for the sale of the family home, it can only be ordered after you are divorced (Decree Absolute).

Transfer of Property:

Although not common, the Family Court in Hong Kong also has the ability to order a transfer of the family home to the other spouse or a child of the family.

The Family Court in Hong Kong acknowledges that it is generally desirable for the primary caring parent to remain in the family home, on the basis that the children remain in a home they are used to and close to their school, and the Family Court will do what they can to maintain that status quo. This however does not mean the Family Court will not take into account cheaper accommodation if this means capital can be released from the family home and the family can move into similar and satisfactory accommodation.

One thing to keep in mind in a transfer of property situation, is whether there is a mortgage attached to the property as this could affect a transfer of property. What will become a factor is whether the receiving party can maintain the mortgage from either his/her own resources or from maintenance received by the other party.

Buy-Out:

Another option to consider, if you have the ability and the funds, is to buy-out your ex-spouse’s interest in the family home. If you choose this option, talk to your solicitor and discuss what provisions are necessary in an agreement/order to secure your interest in this property.

Stay in the Home Pending Sale/Transfer:

Some divorcing couples may consider staying in the family home and live together pending the finalization of the divorce. While this might make sense for some families, it could also create an environment of stress and tension, not only for the divorcing couple, but also for the children. Before choosing this option, it is important to have a plan and discuss this with your ex-spouse so boundaries are established and communication tools are in place should conflict occur. Having a plan will eliminate any tension that may occur when living in close quarters.

Tenancies:

In a city like Hong Kong, it is not unusual for couples not to own a home, but instead become renters due to the high housing costs. In a divorce, it is not uncommon for one party to remain in the rental unit until such time the lease has expired, subject of course to whether the parties have the ability to pay the rent.

Adjustments must be made at times and this relates to rental units as well. In certain cases, there may be insufficient income to pay for two rents each month. Such adjustments may include a “downgrade” to a smaller, less expensive rental unit or even adjust the standard of living.

Discuss these options with your ex-spouse, along with your solicitor. Your solicitor can provide you with more detail on what options are best suited for you and your unique circumstances. While it may be uncomfortable and upsetting to divide an important asset such as the family home, this may also be an opportunity to start fresh and create a new home for you and your family.

Cross Border Views on Inherited Wealth

This article looks at how inherited funds are treated from a cross-border perspective. To the surprise of many, inherited wealth in a divorce may be treated differently depending on the jurisdiction in which you file for divorce. Location is therefore an important factor to consider when divorcing. To unpack this topic, let’s explore and contrast how inherited wealth is treated in Hong Kong vs. the United States of America, in particular the community property state California.

1. Inheritance in Divorce in California: California, like many other states, is a community property state. This means that in a divorce, all property acquired during the marriage is divided equally between the divorcing parties. An exception to this rule occurs when an individual receives an inheritance during the course of the marriage. In those circumstances, under California law, an inheritance is separate property and therefore will be excluded from the division of assets and debts in a family estate (Family Code Section 770).

It is important to note that when an individual receives an inheritance, the monies received must be traceable to the source so there is no confusion as to whether the money is separate property or community property. That is why it is always a good idea to open a separate bank account and deposit inheritance monies into this separate account to identify them and keep them separate. Otherwise, by depositing inheritance funds in a joint community bank account, you are commingling funds. When monies become commingled, it can become very difficult to trace monies back to the separate property source and your former spouse may have an argument that all inherited funds were already spent during the marriage and therefore all remaining funds in the joint account are community property and must be split equally. When in doubt, always keep clean records of any inherited funds and keep records of how these monies have been spent. If you don’t keep track, a tracing expert may be enlisted but tracing can become quite expensive and time-consuming thereby stalling the divorce.

2. Gifts Are Separate Property in Divorce in California: Another exception occurs when an individual receives a gift. For example, if you receive a beautiful piece of jewelry from your spouse for an anniversary or birthday, this gift is generally excluded from the division of assets and debts in a family estate. If, however, the gift could be considered of substantial value, the courts will then look at the asset more carefully and it may be subject to division taking into account the parties’ wealth and finances.

If the asset is determined to be of substantial value, it is community property and must be divided between the parties – unless of course, either party can present a written transmutation agreement changing the character of this asset from community to separate.

3. Inherited Wealth in Divorce in Hong Kong: Over the years, there has been much debate over how inherited funds should be treated in a divorce in Hong Kong and whether these funds should be excluded from division. In Hong Kong, inherited wealth are those assets that come from a source wholly external to a marriage. Like Great Britain, the courts in Hong Kong have regard to the “yardstick of equality” as a starting point, meaning the goal is to divide the asset pool fairly. Courts in Hong Kong may however, veer from this principle and make adjustments, thereby dividing assets “unequally” if after reviewing certain statutory factors, taking into account the whole of the asset pool, reasonable needs, compensation and applying the “sharing principle” if assets exceeds the needs, in addition to the specific circumstances surrounding the divorce, and finds that an individual’s inheritance could be a resource to fulfill and satisfy an individual’s reasonable needs and the needs of the children post-divorce (See the Hong Kong landmark case titled DD v LKW (2010) 13 HKCFAR 537.) As a result, the Court may heed to flexibility in order to find a suitable answer to the circumstances of each case whereby the objective is to reach a just result that is fair for both parties. Thus, unlike California, inheritance funds received by an individual in Hong Kong may be taken into account because it forms part of the asset pool that is a financial resource to one or both of the parties. Stephen J. Peaker, head of the Family Law Department at Oldham, Li & Nie (OLN) and a fellow of the International Academy of Family Lawyers (IAFL) says: “The issue of inherited wealth is becoming more and more prevalent in Hong Kong, both in contested and uncontested cases. The economic success of Hong Kong and the natural passage of time combined have created substantial inherited wealth. One of the key areas of dispute on succession is in relation to family businesses, often with enormous value where one party inherits a business interest. This business can be valued as part of an asset pool and unsurprisingly, this is viewed by the creators of the wealth as inherently unreasonable and has led to the proliferation of generational trusts and the increase in prenuptial agreements.”

It is interesting to note that in Hong Kong, the Court may consider an inheritance even if it has not yet been received, but provided an individual is set to receive an inheritance in the near future or has a perceived resource. Additionally, if you’re involved in a short-term marriage and there are inheritance funds in the asset pool, the courts may not consider the inheritance in the asset division yet if it is a long-term marriage, the courts may include inherited funds, unless these funds were kept entirely separate.

It is important to understand and become knowledgeable of the specific laws of your jurisdiction. Speak with a professional about how to protect your inheritance and what can be done to avoid any issues when dividing assets in your divorce. If you’re getting married, you may want to speak with a family law professional to discuss a prenuptial agreement and ways to avoid any issues in the event of a divorce. Being well prepared will help avoid any heartache in the future!

Round-Up of Divorce News

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